Physician Income

January 19, 2016

No, it's not Ebola or the latest animal-named flu (bird, swine, or otherwise).

Doctors performing unnecessary and often, extremely dangerous procedures, motivated by profits (and not by so-called “defensive medicine” or fear of being sued), has reached near "epidemic" proportion.

Perhaps there’s no more outrageous an example than that of Jacksonville, Florida plastic surgeon, Loren Clayman, who may have deliberately disfigured breasts during implant surgery only to profit “from subsequent surgeries aimed at fixing their problems.” At least that’s the feeling of many patients. Just this week it was reported that over 140 separate patients have come forward, saying Clayman botched their plastic surgery procedures causing disfigured breasts, uneven enlargements, constant pain and burning sensations among other things. The suit claims after the initial surgery, patients would be told they needed another surgery to repair a problem with the first surgery. The doctor would then file a warranty claim with the implant manufacturer for $1,200.

When that surgery didn’t work, he repeated the process until the women gave up, his former patients said. Two of the women said in lawsuits they underwent five surgeries before they stopped going to Clayman for more surgeries.

Nearly 300 people have accused a prolific Munster heart doctor of malpractice for implanting pacemakers or defibrillators they didn’t need and routinely scheduling unnecessary procedures, among other allegations.

The sweeping claims against Dr. Arvind Gandhi and other practitioners at Cardiology Associates of Northwest Indiana could take years to unwind, and they may change the calculus that sets surcharges physicians pay to the Indiana Patient’s Compensation Fund. That fund covers malpractice claims beyond practitioners’ insurance limit of $250,000, up to the statutory cap of $1.25 million.

The first verdict came Dec. 8, when a Lake Superior Court jury ruled against Gandhi, awarding Shannon Greer $450,000. Her late husband, Ken Greer, died after the doctor treated him for an infected pacemaker.

And before Christmas, Dr. Harry Persaud was sentenced to 20 years in federal prison after he was found guilty of “fraud, falsifying documents and money laundering, after ordering and performing inappropriate treatment between 2006 and 2012.” According to the Cleveland Plain Dealer,

Persaud, 56, performed dozens of unnecessary stent insertions, catheterizations and tests, and caused unnecessary coronary artery bypass surgeries to be performed as part of a scheme to overbill Medicare and other insurers for $29 million. He received about $5.7 million worth of payouts.…

Following a four-week trial, a jury in September found Persaud guilty of health-care fraud and 13 counts of making false statements relating to health-care matters. He was also found guilty of money laundering, stemming from $250,000 he transferred from his account to his wife's while he was under investigation.

[Judge] Nugent noted before handing down his sentence that some of the top cardiologists in the country said placing unnecessary heart stents in patients who did not need them – which Persaud did – could be harmful.

In recent years, federal officials have brought several prominent cases against cardiologists and hospitals, accusing them of performing unnecessary procedures like inserting stents into coronary arteries. While medical professionals say there is no indication that cardiology has more unnecessary procedures than, say, orthopedics, they do note that the specialty has come under increased scrutiny by regulators because the procedures tend to be reimbursed by Medicare and private insurance at significantly higher levels than those in many other specialties.

And this type of situation is not new.

A seven-year federal investigation recently revealed that thousands of elderly Medicare patients in the United States have undergone surgeries to implant cardioverter defibrillators (ICDs) in violation of Medicare’s science-based coverage conditions. On Oct. 30, the U.S. Department of Justice announced it had reached settlements with 70 hospital systems involving 457 hospitals in 43 states for more than $250 million.

Hospitals across the country have been charged with falsifying patient records to justify unnecessary procedures.

[In 2014], a hospital system in eastern Kentucky paid nearly $41 million to settle allegations, without admitting wrongdoing, that it billed for unnecessary coronary stents and catheterizations after a group of area doctors falsified patient records to justify the procedures. The hospital system, Ashland Hospital Corporation, faces 120 private lawsuits from patients who claim they underwent unnecessary procedures.”

According to Dr. Steven Nissen, chief of cardiovascular medicine at the Cleveland Clinic and the former president of the American College of Cardiology, “We are still a fee-for-service system, and that creates, in my view, misaligned incentives among some physicians to do more procedures and among some institutions, particularly in areas where there is not tight medical supervision, to turn a blind eye and enjoy the high revenue stream.”

September 09, 2011

Look, this is nothing against doctors. We all love our doctors (except the bad or obnoxious ones, or the ones on the take from the drug industry), and we want them to do good work because, well, our lives depend on it. But honestly, the complaining that goes on about their malpractice insurance premiums!

According to the Bureau of Labor Statistics, of the top 10 earning occupations in this country, nine are doctors and dentists (ok, I'm counting podiatrists in that.) (And no, consumer advocates don’t make the top 10. Nor do lawyers, by the way.) But that’s not all. According to a new study published in Health Affairs, being a U.S. physician these days is about as close to hitting the international professional jackpot as winning big at the Monte Carlo crap tables.

“American primary care and orthopedic physicians are paid more for each service than are their counterparts in Australia, Canada, France, Germany and the United Kingdom,” said the study, by Sherry A. Glied, an assistant secretary of health and human services, and Miriam J. Laugesen, an assistant professor of health policy at Columbia.

The study, being published Thursday in the journal Health Affairs, found that the incomes of primary care doctors and orthopedic surgeons were substantially higher in the United States than in other countries. Moreover, it said, the difference results mainly from higher fees, not from higher costs of the doctors’ medical practice, a larger number or volume of services or higher medical school tuition.

Also, “Medical students often cite higher pay as a reason for choosing to become specialists.” For example, “’Among orthopedic surgeons, those who had the highest annual pretax incomes, net of expenses, were in the United States,’” with an average of $442,450, the study said.” So this is interesting. Because of the way insurers rates doctors – by specialty, not by experience – specialists like orthopedic surgeons automatically pay more for malpractice insurance. But rather than running away from these kinds of specialties, med students are heading straight for them! That’s how much money they’re gonna make.

Nor should malpractice premiums be an issue for any physician right now. Malpractice premiums rate hikes are cyclical for reasons having nothing to do with claims or payouts or a state’s particularly “tort” laws. (That means you too, Texas.) And we’ve been in an extended “soft market” (stable/low rates) for awhile now. But don’t just take our word for it. Check out this article from Modern Medicine magazine:

Under increasing pressure from third-party payers and facing the uncertainty of healthcare reform, physicians have been able to find some comfort in stable or, in some cases, declining medical liability premiums.

The years-long pattern of plateaued premiums continues, according to Medical Economics' 2010 Exclusive Survey on malpractice, part of our Continuing Study that also examined earnings (September 24 issue) and productivity (October 22 issue).

So pull yourselves together and stop all that crying, Doctor Doctor Mr. Md. Things could be worse. You could be anywhere else in the world, where patients don’t have to pay to see you.

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